Founders agonize over pricing more than any other decision, and change it less often than any other decision. Both are mistakes. Price is not a number you get right once; it is a positioning statement you revise as the product earns more.
Start from the problem, not the cost
Cost-plus pricing tells the customer what you spend. Value pricing tells them what the problem costs. If your product saves a restaurant two no-show orders a day, the math is public: that is roughly $40 a day, $1,200 a month. A $99 price against a $1,200 problem sells itself; the same $99 against an unquantified problem is "expensive."
Write the customer's math down before you pick a number. If you cannot write it, you have a positioning problem, not a pricing problem.
Charge from day one
Free pilots feel like momentum and measure nothing. A customer who pays $50 teaches you more than fifty who pay nothing, because payment is the only signal that survives politeness. Early prices can be small. They cannot be zero.
Three tiers, one job each
- The anchor. A top tier priced high enough that most buyers say no. Its job is to make the middle tier look reasonable — and to catch the occasional whale.
- The workhorse. The tier you actually want people on. Everything your ICP needs, nothing they do not.
- The fence. A bottom tier missing exactly one thing your real buyer cannot live without. Its job is to be outgrown.
The fence matters most. Pick the fenced feature from what your payers pull on hardest — seats, locations, integrations, volume. If nobody upgrades, you fenced the wrong thing.
Raise prices once a year, tell the truth
New customers get the new price immediately. Existing customers get notice, a reason, and a grandfathered period. In my experience the churn from an honest 20% increase is consistently smaller than founders fear — and the customers who leave over it were usually outside the ICP anyway. That is the filter working.
Pricing is an ICP filter
A price that feels trivial to your ideal customer will scare away lookers. That is the price doing its job. When a prospect haggles hard on a price your real buyers accept without blinking, you have learned something about the prospect, not the price.
The checklist
- The customer's cost-of-problem math, written down
- A non-zero price from the first customer
- Three tiers: anchor, workhorse, fence
- An annual price review on the calendar
- Churn-by-tier tracked after every change